SOLUTION: How much interest is earned in 2 years on $4000 deposited in an account thats pays 6% interest, compounded quarterly? I've come close to the answer but haven't reached the corr

Question 518126: How much interest is earned in 2 years on $4000 deposited in an account thats pays 6% interest, compounded quarterly?
I've come close to the answer but haven't reached the correct one.
It would help to be shown a step by step process! Thank you!
Answer by scott8148(6628) (Show Source): You can put this solution on YOUR website!
A = P (1 + r)^t

quarterly compounding means that there are 8 compoundings in 2 yr and the interest per period is 1.5% (6% / 4)

a = 4000 (1 + .015)^8 ___ this will give the accrued amount
___ just subtract the 4000 to find the interest
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